The field of decision analysis provides a framework for making decisions with uncertain outcomes and provides a value of information (VOI) metric. VOI is a tool to determine whether purchasing a new information source would improve a decision-maker's chances of taking the optimal action. In other words, VOI provides the decision maker an estimate of how a particular information source can improve the probability of a successful outcome. For example, a typical decision is to determine a successful well-site given an interpretation of available geophysical properties around that site. Various geophysical properties may be used including electrical resistivity via a magneto-tellurics (MT) data inversion (in the geothermal field), seismic, gravity, and electromagnetic (in the oil and gas context). The geophysical properties (e.g., seismic) would provide estimates, through inversion, of velocity, density and electrical conductivity.
In order to calculate a VOI, a posterior distribution is calculated. However, none of the conventional methods employ stochastic inversion to obtain the posterior distribution or probabilities. Conventional methods use statistics that are acquired either subjectively or by using non-physics based statistical methods that are subjective in nature and are not related to the physics of the rock formation leading to a potentially erroneous estimate of a probability of well success.
Therefore, there is a need for a method or methods that cure these and other deficiencies in the conventional methods to provide a decision-risk method by moving from subjective assessment of risks to a quantitative approach where parameters calculated from stochastic inversion replace a decision maker's conjectures.